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HSC Economic questions need help please (1 Viewer)
- Thread starter NWO
- Start date
kitchentable
New Member
- Joined
- Mar 30, 2012
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- HSC
- 2013
I'm not sure about the first one, I'll come back to that if I ever remember how to do that.
For the second one, inflation has increased simply because the CPI has increased, and because the terms of trade has deteriorated import prices have risen faster than export prices because a greater volume of exports has to be sold to finance a given number of imports. So I'd say the answer is D.
For the third one, any increase in the MPC will result in an increase in the multiplier and I'm pretty sure an increase in the equilibrium level of income.
For the fourth one, net foreign liabilities = net foreign debt + foreign equity. So...
780-550= 230
230/1120 X 100 = 20.5%
For the 5th one, I got 800 but I'm not sure how, I'll come back and let you know once I figure out what I did.
For the last one, the multiplier = 1/1-MPC or 1/MPS
So you need to find either the MPC or the MPS
Let's go for the MPC which = the change in Consumption over the change in Income
In year one consumption was 100, in year 3 it's 300, so the difference is 200.
So in year one income was 550, and in year 3 it's 950. So the change is 400.
200/400 = .5
Our MPC is .5
so 1/.5 = 2
2 = the multiplier (I think)
For the second one, inflation has increased simply because the CPI has increased, and because the terms of trade has deteriorated import prices have risen faster than export prices because a greater volume of exports has to be sold to finance a given number of imports. So I'd say the answer is D.
For the third one, any increase in the MPC will result in an increase in the multiplier and I'm pretty sure an increase in the equilibrium level of income.
For the fourth one, net foreign liabilities = net foreign debt + foreign equity. So...
780-550= 230
230/1120 X 100 = 20.5%
For the 5th one, I got 800 but I'm not sure how, I'll come back and let you know once I figure out what I did.
For the last one, the multiplier = 1/1-MPC or 1/MPS
So you need to find either the MPC or the MPS
Let's go for the MPC which = the change in Consumption over the change in Income
In year one consumption was 100, in year 3 it's 300, so the difference is 200.
So in year one income was 550, and in year 3 it's 950. So the change is 400.
200/400 = .5
Our MPC is .5
so 1/.5 = 2
2 = the multiplier (I think)
Drifting95
Should i change my DP?
1. Work out the multiplier first, so: 225/90 = 2.5
Sub this into the multiplier formula which is 1/MPS and work it out logically- 2.5 = 1/MPS and switch around so it's 1/2.5 = MPS/1 . Multiply 1 by 1/25 and this gets the MPS to be 0.4. Therefore the MPC is 0.6
2. "inflation has increased simply because the CPI has increased" No. An increase in the index doesn't mean a rise in inflation ALL the time, use the proper formula. e.g 130-120/120 x100 = 8.3% increase
Answer is C imo
3. B. Higher the MPC, the higher the multiplier as higher levels of consumption creates more national income, economic growth etc as more spending is occurring. Think of it logically, the more people spend, the higher business profits are. The higher business profits are, this leads to higher incomes for individuals (leading to higher taxation revenue) and improved business confidence, which in turns leads to additional investment. In turn, this will lead to a higher level of economic growth, therefore resulting in an increase in national income.
4. A. Refer to kitchentable's working
5. D. I don't do the correct working lol, i just did it similar to rise/run. For every increase of $50 for C, this results in an increase of $100 for national income.
Sub this into the multiplier formula which is 1/MPS and work it out logically- 2.5 = 1/MPS and switch around so it's 1/2.5 = MPS/1 . Multiply 1 by 1/25 and this gets the MPS to be 0.4. Therefore the MPC is 0.6
2. "inflation has increased simply because the CPI has increased" No. An increase in the index doesn't mean a rise in inflation ALL the time, use the proper formula. e.g 130-120/120 x100 = 8.3% increase
Answer is C imo
3. B. Higher the MPC, the higher the multiplier as higher levels of consumption creates more national income, economic growth etc as more spending is occurring. Think of it logically, the more people spend, the higher business profits are. The higher business profits are, this leads to higher incomes for individuals (leading to higher taxation revenue) and improved business confidence, which in turns leads to additional investment. In turn, this will lead to a higher level of economic growth, therefore resulting in an increase in national income.
4. A. Refer to kitchentable's working
5. D. I don't do the correct working lol, i just did it similar to rise/run. For every increase of $50 for C, this results in an increase of $100 for national income.